EXCERPT: A former San Diego County investment officer was taken aback when Sweetwater schools officials pushed to have the least qualified bidder selected to market Proposition O construction bonds, she testified to the grand jury.
Michelle Durgy, now the chief investment officer for the city and county of San Francisco, served on a panel to help select the underwriter.
The committee did not select Gary Allen Cabello, who is now charged with bribing officials at Sweetwater and Southwestern College to obtain multimillion dollar underwriting contracts for his company, Alta Vista Financial. He has pleaded not guilty.
Durgy testified that Sweetwater officials told her Alta Vista would have to be selected.
"And I said, 'Oh no, that is not happening,'" Durgy told the grand jury. ...
... Following the firms' interviews, the selection committee picked two major underwriting firms and two minority-owned firms as their recommendations to the board. The list did not include Alta Vista.
When former Sweetwater Chief Financial Officer Dianne Russo saw this, she quickly objected and said that Alta Vista must be included, Durgy testified.
"At that point, Diane spoke up again and said, "Oh, (former Sweetwater Superintendent) Jesus Gandara... is not going to like this," Durgy said. "And I said, 'Well, too bad. That's who we selected.' She said, 'No, no, Michelle, you don't understand. Alta Vista has to be on that list.'"
Of the 10 firms that interviewed, Durgy said that Alta Vista performed the worst. They were admittedly unprepared and she described their presentation as thin. ...
... Durgy testified that she thought Russo was kidding at first, but then Russo said that not only did Gandara expect them to be on the list - he wanted them to be the lead underwriter.
Durgy said she was eventually overruled by the rest of the selection committee, and Alta Vista was included. ...
... The district attorney is attempting to prove South County officials accepted meals, sporting events, plays and other considerations in exchange for approving contracts. ...
Link to Volume 5, San Diego County Grand Jury Transcript: